After facing the potential burden of his own exorbitant medical bills, a cancer survivor is fighting back by taking on a Herculean task of advocating for patients who are facing high drug prices.
From his small office in Washington, DC, David Mitchell, age 66, founded Patients for Affordable Drugs, or P4AD, a non-profit organization aimed to rein in the soaring costs of drugs and make them more affordable for patients.
Mr. Mitchell is in a unique position for this task. A multiple myeloma survivor, he knew the onerous cost of cancer drugs. His drug prescription bill was $440,000 a year. Because he is covered by Medicare and has supplemental Medicare Part B, his insurance covered the cost of his expensive medications. His cancer is now in remission, but he could not stop thinking of the thousands of patients with cancer or other chronic diseases who don’t have insurance coverage for their medications.
Patients for Affordable Drugs
His “aha” moment struck one morning early in 2018, when he realized that no one was speaking on behalf of patients wrestling with this problem. With the support of his wife, who is also a cancer survivor, they launched P4AD early this year.
Mr. Mitchell’s 30-year background in healthcare policy and communications gave him the necessary knowledge to tackle a bureaucracy that seems an insurmountable uphill battle.
To jumpstart P4AD, Mr. Mitchell dug into $75,000 of his own savings, got a $500,000 grant from the Laura and John Arnold Foundation, and $75,000 from fundraising efforts. P4AD includes a staff of 8 and several volunteers who plot to overturn the status quo.
To amplify the patient’s voice, Mr. Mitchell says that the goal is to shake up policymakers, elected officials, and media, while organizing, activating, and mobilizing patients toward lowering drug prices.
So far, they collected 8,000 patient stories toward creating a community of patients to muster change on the federal, state, and local levels.
Holding Drug Companies Responsible
The P4AD team may be organizing a rally to protest a drug company’s skyrocketing prices one week, and the next week attend press conferences to support legislation that calls for transparency regarding drug price increases. The group also monitors active legislative bills in Congress. One of those bills—the CREATES Act—would stop the abuses by drug companies that prevent cheaper drugs from reaching consumers.
Mr. Mitchell’s efforts are making headway across the country—a bill on drug price gouging recently passed in Maryland, and another bill on cost transparency passed in Nevada, he said.
Although Mr. Mitchell occasionally scores a meeting with Pharmaceutical Research and Manufacturers of America (PhRMA) executives to try to make the case for affordable drugs, he often comes up empty, with the executives doling out “industry-speak” in their defense.
“The reception from PhRMA is to ignore us, or discredit us,” Mr. Mitchell says. “PhRMA is used to working with groups it funds, and we don’t work for them. We work for patients.”
Despite the many barriers, Mr. Mitchell has no plans to give up. “It’s an uphill fight,” he says, “But no one told us this would be easy.”
Drug Cost Transparency
Meanwhile, the pharmaceutical industry may be undergoing a sea change that will help patients make more informed decisions, said executives at PhRMA, which represents the country’s leading drug companies.
PhRMA may be taking several steps to reverse the industry’s image. In one instance, PhRMA members have committed to providing more transparency about the cost of medicines. A recent agreement to change direct-to-consumer (DTC) TV ads will soon provide patients information on the drug’s costs, including the list price of the medicine, out-of-pocket costs, or other potential drug costs and available financial assistance programs.
“Our member companies are taking a new approach to how they communicate about medicines in DTC television advertisements, to make it easier for patients to access information about medicine costs,” said Stephen J. Ubl, PhRMA President and Chief Executive Officer.
Drug Costs Slow Down?
Research shows that the rise in drug cost is not as steep as the public believes. IQVIA, one of the largest healthcare research organizations, has found that spending on medicines grew by only 0.6% and net drug prices grew by 1.9% last year.1
PhRMA credits the drug industry for its “robust negotiation and competition” for this incremental price growth that is less than the US inflation, said Holly Campbell, PhRMA’s Deputy Vice-President of Public Affairs.
The slowdown in drug costs is, in part, the result of increasing rebates and discounts from drug companies, according to Ms. Campbell, who said that PhRMA companies rebate, on average, 40% of the list price back to consumers, which totaled $150 billion in discounts last year.
To help patients be able to take their medications even when facing high out-of-pocket drug costs, many drug companies today offer patients who have commercial insurance different types of copay coupons for many of their cancer drugs. In addition, companies offer patient assistance programs that also help uninsured and underinsured patients to get their medications for free or for reduced costs.
“When cost-sharing rises, patients are more likely to abandon their medicines,” Ms. Campbell said. “Copay coupons help patients stay adherent to medicines while facing growing out-of-pocket costs. Research shows that for new patients using coupons in 2017, if copay cards had not been used, patients would be almost 3 times as likely to abandon their medicines at the pharmacy.”
The Insurance Copay Conundrum
However, in response to drug coupons, some insurance companies are implementing copay programs that block the copay coupons from being applied to their deductibles and out-of-pocket maximums for some drugs, leading to patients paying significantly more for their drugs, according to Ms. Campbell.
Insurance companies “are marketing accumulator programs in a misleading way to suggest they will provide greater cost protection for patients, when the reality is the opposite. Patients often learn too late that these programs were added to their insurance coverage,” Ms. Campbell said.
Hospitals Mark Up Drug Costs
The drug industry is not the only responsible stakeholder, according to experts. Hospitals are also responsible for escalating drug costs. For example, nearly 1 of 5 hospitals marks up drug prices by 700% or more, according to an analysis commissioned by PhRMA.2
This analysis showed that if a hospital purchased a drug for $150, a 700% markup could result in patients being billed $1050 for that medicine. In addition, 320 hospitals—8% of those included in the study—marked up some medicine prices more than 1000%.2
This study used information from the Centers for Medicare and Medicaid Services that included charges for all medicines from 3,792 hospitals in the United States. On average, hospitals marked up the price of medicines nearly 500%.2
“Hospitals receive billions of dollars every year in negotiated and mandatory discounts from biopharmaceutical companies, while simultaneously increasing the price of these medicines to insurers and patients,” Mr. Ubl said. “To make medicines more affordable for patients, we must address the role hospital markups play in driving up medicine costs.”
- IQVIA Institute. Medicine use and spending in the U.S.: a review of 2017 and outlook to 2022. April 2018. www.iqvia.com/institute/reports/medicine-use-and-spending-in-the-us-review-of-2017-outlook-to-2022.
- The Moran Company. Hospital charges and reimbursement for medicines: analysis of cost-to-charge ratios. September 2018. www.themorancompany.com/wp-content/uploads/2018/09/Hospital- Charges-Reimbursement-for-Medicines-August-2018.pdf.